ACIT, New Delhi V. Mrs. Shameem Dev Azad, New Delhi

ITA 2321/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65278 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-05-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 09-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURJANI MOHANTY
• Assessee Lawyers: SHLRI V K AGGARWAL
• Keywords: Unexplained investment; Fair market value; Valuation report; Competent authority; Reassessment proceedings; Borrowed satisfaction
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2321/DEL./2011 (ASSESSMENT YEAR : 2002-03) ACIT, CIRCLE 31(1), VS. SHAMEEM DEV AZAD, NEW DELHI. NO.5, SOUTH AVENUE LANE, NEW DELHI. (PAN/GIR NO.AAKPA7617D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHLRI V.K. AGGARWAL, AR REVENUE BY : SMT. SURJANI MOHANTY. SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER PASSED BY CIT(A) XXVI, NEW DELHI, DATED 25.02.2011, RELEVANT TO ASS ESSMENT YEAR 200-03, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.31,81,300/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN HOLDING THAT THE ASSESSING OFFICER HAD NOT RECORDED HIS OWN SATISFACTION IGNORING THE FACT THAT INVESTIGATION WING IS ALSO A N ARM OF THE DEPARTMENT CONDUCTING ENQUIRIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN HOLDING THAT REASONS WERE SUPPLIED TO THE ASSESSEE BEYOND 6 YEARS IS NOT ACCEPTABLE, AS THERE IS NO PROVISIONS IN SECTION 14 7 FOR SUPPLY OF REASONS TO THE ASSESSEE BEFORE THE EXPIRY OF 6 YEARS, WHEREAS THERE IS PROVISONS OF RECORDING OF REASONS BEFORE ISSUE OF NOTICE US/ 148 . I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 2 2. THE FACTS INDICATE THAT BASED ON COMMUNICATION RECEIVED FROM THE INVESTIGATION WING THE ASSESSING OFFICER ON 26.3.2009 INITIATED P ROCEEDINGS U/S 148 TO TAX THE INCOME ESCAPING ASSESSMENT FOR THE A.Y. 2002-03. THE INFOR MATION PERTAINED TO LOW INVESTMENT SHOWN BY THE ASSESSEE IN PURCHASE OF 1ST FLOOR OF RESIDENTIAL HOUSE NO. B-451, NEW FRIENDS COLONY, NEW DELHI ON 3.08.2001 AT RS.20,35, 000/-, WHEREAS THE MARKET VALUE OF THE PROPERTY, AROUND THAT PERIOD, WAS RS.1 CRORE. I N RESPONSE TO THE NOTICE U/S 148 THE ASSESSEE INFORMED THE ASSESSING OFFICER TO TREAT T HE ORIGINAL RETURN FILED ON 25.07.2002 AS HAVING BEEN FILED IN RESPONSE TO THE NOTICE U/S 148. THEREAFTER ASSESSEES OBJECTION TO THE INITIATION OF PROCEEDINGS U/S 148 WERE DISPOSED OFF BY THE ASSESSING OFFICER. IN THE COURSE OF PROCEEDINGS, A REFERENCE U/S 142A WAS MAD E TO THE DVO TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY. THE DVO VIDE HIS REPO RT DATED 22.12.2009 ESTIMATED THE FAIR MARKET VALUE OF THE PROPERTY AT RS.5216289. TH EREAFTER THE ASSESSEE OBTAINED A VALUATION REPORT FROM A REGISTERED APPROVED VALUER WHO DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY AS ON 3.08.2001 AT RS.2190926 ONLY. 2.1 THE ASSESSING OFFICER ON DUE CONSIDERATION OF THE APPROVED VALUER'S REPORT RECORDED REASONS FOR ITS NON ACCEPTANCE AND HELD TH AT THE DVO'S REPORT DATED 22.12.2009, CORRECTLY DETERMINED THE FAIR MARKET VALUE OF THE P ROPERTY AT RS.52,16,300. THEREFORE AS THE ASSESSEE HAD DISCLOSED ONLY A SUM OF R.20,35,0 00 AS THE INVESTMENT IN THE PROPERTY, THE BALANCE AMOUNT OF RS.31,81,300 WAS TREATED AS U NDISCLOSED INVESTMENT AND ADDED TO THE ASSESSEE TOTAL INCOME. IN ADDITION TO THE UNDIS CLOSED INVESTMENT, THE ASSESSING OFFICER ALSO TREATED A SUM OF RS.20 LACS BEING LOAN S AS UNPROVED CASH CREDITS U/S 68. I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 3 3. THE ASSESSEE TOOK UP THE MATTER IN APPEAL AND I T WAS SUBMITTED THAT THE REASONS RECORDED BY THE ASSESSING OFFICER ARE NOT BASED ON COGENT INFORMATION AND THAT THERE WAS NO NEXUS BETWEEN THE 'INFORMATION' RECEIVED AND THE BELIEF FORMED BY HIM ABOUT THE ESCAPEMENT OF INCOME. THE ASSESSING OFFICER HAD REC EIVED INFORMATION FROM THE INVESTIGATION WING THAT THE ASSESSEE HAD INVESTED A SUM OF RS.20,35,000 ONLY TOWARDS PURCHASE OF PROPERTY AT B-451, NEW FRIENDS COLONY, NEW DELHI ON 3.8.2001. AS PER THE INVESTIGATION WING THE MARKET VALUE OF THE PROPERTY ON THE DATE OF PURCHASE WAS RS.1 CRORE. HOWEVER ASSESSEE HAD NOT DISCLOSED THE SUM OF RS.1 CRORE AS HER INVESTMENT. THEREFORE ASSESSING OFFICER FORMED A BELIEF THAT IN COME OF RS.1 CRORE HAD ESCAPED ASSESSMENT. IN VIEW OF THESE REASONS RECORDED BY TH E ASSESSING OFFICER, THE LD. COUNSEL CONTENTED THAT IN THE ABSENCE OF COGENT REASONS FOR FORMING THE PROPER BELIEF THAT INCOME HAD ESCAPED ASSESSMENT, THE PROCEEDINGS INITIATED U /S 147 WERE ILLEGAL. FOR THIS HE RELIED UPON THE DECISION OF THE HON'BLE DELHI ITAT IN THE CASE OF MITSUI MARUBENI VS. DCLT (2007) TIOL-323-ITAT, DELHI IN WHICH IT WAS HELD AS UNDER:- 'THE REASONS RECORDED BY THE ASSESSING OFFICER ARE FOUND TO BE NOT BASED ON RELEVANT OR SPECIFIC INFORMATION. THE BELIEF ALLEGE D TO BE HELD BY THE ASSESSING OFFICER IS HELD TO BE NOT BONAFIDE. THERE HAS BEEN NON APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. THERE IS NO MATERIAL FOR THE BELIEF REGARDING ESCAPEMENT OF INCOME. THERE IS NO NEXUS BETWEEN THE MATERIAL COMING INTO THE POSSESSION OF THE ASSESSING OFFICER AND THE BELIEF ENTERTAINED BY THE ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME. THE REASSES SMENT PROCEEDINGS ARE, THEREFORE, ANNULLED.' 5.2 THE LD. COUNSEL FURTHER STATED THAT THE ASSESS ING OFFICER'S SATISFACTION IS A BORROWED SATISFACTION I.E. OF THE OFFICER OF THE IN VESTIGATION WING AND NOT HIS OWN. HE RELIED UPON THE RAJASTHAN HIGH COURT DECISION IN TH E CASE OF CLT VS. SHREE RAJASTHAN SYNTAX LTD. (2008) 313 ITR 231 (RAJ.) ON THE POINT THAT BORROWED SATISFACTION IS NOT I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 4 SUFFICIENT TO CONFER POWER TO THE ASSESSING OFFICER TO INITIATE PROCEEDINGS U/S 147. IT WAS FURTHER CONTENTED THAT THE ASSESSING OFFICER HAD IS SUED THE NOTICE IN A MECHANICAL MANNER WITHOUT VERIFYING THE CORRECTNESS OF THE INFORMATIO N RECEIVED BY HIM. IT WAS STATED THAT THE PROCEEDINGS HAVE BEEN INITIATED MERELY TO VERIF Y THE INFORMATION RECEIVED WHICH IS NOT PERMISSIBLE U/S 148 AS HAS BEEN HELD BY HON'BLE ITAT MUMBAI IN THE CASE OF M/S SHEONEY DIGITAL SYSTEMS LTD. VS. ACIT (2009) TIOL-5 64 ITAT MUMBAI AND ACIT VS. O.P. CHAWLA (2008) 116 TIJ (DELHI) (TM) 755. - IT WAS FURTHER STATED THAT COURTS HAVE HELD REASO N TO BELIEVE CANNOT BE SUBSTITUTED BY REASON TO SUSPECT AS IN THE INSTANT CASE. - CIT VS. GUPTA ABHUSHAN PVT. LTD. (2008) 312 ITR 1 66 (DELHI), MIS DASS FRIENDS BUILDERS PVT. LTD. VS. DCLT (2006) 280 ITR 77 (ALLA HABAD). 5.3 THE LD. COUNSEL, DRAWING ATTENTION TO THE APPRO VAL GIVEN BY THE ADD/. CIT FOR THE REOPENING U/S 147, STATED THAT THE APPROVAL HAS BEE N GIVEN IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND AS THE NOTING SIMPLY ST ATES 'I AM SATISFIED WITH THE REASONS RECORDED. IT IS APPROVED'. RELYING UPON THE DECIS ION OF THE HON'BLE MP HIGH COURT IN THE CASE OF ARJUN SINGH AND OTHERS 246 ITR 363, IT WAS CONTENDED THAT MECHANICAL APPROACH OF THE ADD/. CIT VITIATES THE VALIDITY OF THE PROCEEDINGS U/S 147. THE LD. COUNSEL MADE THE FINAL SUBMISSION ON THE ISSUE OF T HE LEGALITY OF THE PROCEEDING U/S 148 AS UNDER:- 'IN THIS CASE, NOTICE U/S 148 WAS ISSUED ON 26.03.2 009. THE APPELLANT VIDE LETTER DATED 15.07.2009 REQUESTED THE LD. ASSESSING OFFICE R TO PROVIDE THE REASONS FOR REOPENING THE ASSESSMENT. SINCE REASONS WERE NOT PR OVIDED, AGAIN A REQUEST WAS MADE VIDE LETTER DATED 9. 10.2009 TO PROVIDE THE RE ASONS. THE REASONS WERE PROVIDED ON 21.10.2009 AS IS CLEAR FROM THE COPY OF REASONS SUPPLIED TO THE APPELLANT. THIS CLEARLY INDICATES THAT THE REASONS WERE NOT SUPPLIED WITHIN SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. SINCE THE REASONS WERE SUPPLIED SIX YEARS AFTER THE END OF RELEVANT A. Y., THE NOTICE IS BAD IN LAW AND HENCE THE REASSESSMENT ORDER IS ILLEGAL. THIS VIEW IS FULLY CONFIRMED BY THE DECISION OF HON'BLE ITAT DELHI IN THE CASE OF SHRI BALWANT RAI WADHWA VS. ITO I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 5 DATED 14.01.20 I I. THE HON'BLE ITAT HAS HELD THAT IF REASONS FOR REOPENING ARE NOT SUPPLIED BEFORE THE EXPIRY OF PERIOD OF SIX YEA RS, NOTICE U/S 148 IS INVALID, ACCORDINGLY THE REASSESSMENT ORDER WAS QUASHED. 5.4 ATTENTION WAS ALSO DRAWN TO CIT(A)S (PREDECES SOR'S) ORDER DATED 18.06.2010 IN APPEAL NO. 337/09-10 IN THE CASE OF THE ASSESSEE'S FATHER LATE SH. MOHAMMAD A. DEV IN WHOSE CASE, BASED ON SIMILAR LETTER OF THE INVESTIG ATION WING PERTAINING TO THE PURCHASE OF THE GROUND FLOOR OF SAME PROPERTY I.E. B-451, NE W FRIENDS COLONY, PROCEEDINGS INITIATED U/S 147 WERE HELD NOT IN ACCORDANCE WITH LAW. THE LD. COUNSEL THEREFORE RELYING UPON THE SAID ORDER SUBMITTED THAT THE PROCEEDINGS U/S 147 DESERVE TO BE HELD AS BAD IN LAW AND RESULTANT ASSESSMENT ORDER DATED 30.12.1998 BE QUASHED. 6. CIT(A), WHILE CONSIDERING AND ACCEPTING THE PLEA OF THE ASSESSEE HAS CONCLUDED TO HOLD THAT PROCEEDINGS U/S 147 HAVE NOT BEEN VALIDLY INITIATED AND ALL RESULTANT PROCEEDINGS INCLUDING THE FRAMING OF THE ORDER U/S 143/147 WERE ANNULLED WHILE DECIDING THE APPEAL OF THE ASSESSEE. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), DEPARTMENT HAS COME UP IN APPEAL AND WHILE RELYING UPON DELHI HIGH COURT DECISION IN THE CASE OF AG HOLDINGS PVT. LTD. VS. ITO, WPC 8031/2011 DATED APRIL 25, 2012 REPORTED IN 2012 TIOL-330-HC-DEL-IT, WHEREIN EARLIER DECISION OF DELHI HIGH COURT IN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. VS. CIT & ANOTHER, REPORTED IN 3 08 I.T.R. 38, GKN DRIVESHAFTS (INDIA) LTD., 259 I.T.R. 19(SC) AND VARIOUS OTHER D ECISIONS HAVE BEEN REFERRED AND DISCUSSED, IT HAS BEEN HELD THAT DELAY IN SUPPLYING THE REASONS RECORDED BY THE ASSESSING OFFICER TO THE PETITIONER CANNOT ITSELF INVALIDATE THE RE-ASSESSMENT PROCEEDINGS. SINCE CIT(A) HAS MAINLY RELIED UPON THE DECISION OF HARYA NA ACRYLIC MANUFACTURING CO. (SUPRA) TO HOLD THE RE-ASSESSMENT PROCEEDINGS TO BE INVALID, THEREFORE, ORDER OF CIT(A) I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 6 SHOULD BE REVERSED AND MATTER BE RESTORED BACK ON H IS FILE TO DECIDE THE APPEAL OF THE ASSESSEE ON MERITS AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 8. LD.COUNSEL FOR THE ASSESSEE WHILE REITERATING TH E SUBMISSIONS AS MADE BEFORE CIT(A) AND LAYING STRESS ON THE POINTS RAISED IN SY NOPSIS OF SUBMISSIONS DATED 25.5.2012 WITH REGARD TO THE REASONS CONVEYED BEYOND SIX YEAR S, REASON NOT BASED ON INFORMATION, NON-APPLICATION OF MIND BY THE ASSESSING OFFICER, T HERE BEING NO ESCAPEMENT OF INCOME, RAISING ISSUE ABOUT BORROWED SATISFACTION, PERMISSI ONS FROM ADDL.CIT BEING MECHANICAL, REASONS TO SUSPECT VS. REASONS TO BELIEVE, VERIFICA TION OF INFORMATION VS. SECTION 147, REASONS RECORDED ONLY TO BE CONSIDERED FOR JUSTIFIC ATION OF NOTICE U/S 148 AND ADDITION OF RS.31,81,300/- ON ACCOUNT OF UNEXPLAINED INVESTMENT AND RS.20,00,000/- OF UNEXPLAINED LOANS COULD NOT OTHERWISE BE MADE AND NEEDED TO BE DELETED AND FURTHER RELYING UPON THE VARIOUS DECISIONS, IT WAS PLEADED THAT CIT(A) HAS T AKEN JUST AND PROPER VIEW OF THE MATTER TO HOLD THE RE-ASSESSMENT TO BE INVALID WHOSE ACTIO N BEING LEGALLY CORRECT NEEDS CONFIRMATION. IT WAS THUS PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER. 9. LD.DR, IN ORDER TO COUNTER THE SUBMISSIONS OF LD .COUNSEL FOR THE ASSESSEE, HAS PLEADED THAT SINCE VALID REASONS HAVE BEEN RECORDED WHICH ARE BASED ON INFORMATION AND THERE IS PROPER APPLICATION OF MIND , WHEN THERE IS CLEAR ESCAPEMENT OF INCOME AND THERE IS NO BORROWED SATISFACTION AS ASSESSING OFFICER HA S RECORDED HIS OWN SATISFACTION ABOUT ESCAPEMENT. THERE WAS PROPER PERMISSION FROM ADDL.C IT(A) FOR INITIATION OF RE- ASSESSMENT PROCEEDINGS AND THE CASE LAWS RELIED UPO N BY THE LD.COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE ON FACTS WHEN LATEST DECISION IN THE CASE OF AG HOLDINGS PVT. LTD. VS. ITO (SUPRA) HAS CLEARLY DISTINGUISHED THE EARLIER D ECISION IN THE CASE OF HARYANA ACRYLIC I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 7 PVT. LTD., SO, THERE WAS NO JUSTIFICATION FOR CIT(A ) TO CANCEL THE RE-ASSESSMENT. THEREFORE, IT WAS URGED FOR SETTING ASIDE THE ORDER OF CIT(A) AND RESTORING THE MATTER ON HIS FILE FOR DECIDING THE APPEAL ON MERITS ON ACCOU NT OF ADDITIONS. 10. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MA TERIAL ON RECORD AS WELL AS CASE LAWS CITED BY RIVAL SIDES AS WELL AS CASE LAWS CITE D BY RIVAL SIDES. WE HAVE ALSO GONE THROUGH THE ORDERS OF ASSESSING OFFICER AS WELL AS OF THE CIT(A). THE INVESTIGATION WING OF THE INCOME-TAX DEPTT. RECEIVED INFORMATION ABOUT SALE OF PROPERTY TO THE ASSESSEE ON HIGHER PRICE THAN RECORDED IN THE SALE DOCUMENTS. FURTHER, INVESTIGATION WAS DONE IN THIS CASE AND THEN INFORMATION WAS PASSED ON TO THE ASSE SSING OFFICER WHO RECORDED THE REASONS AND AFTER OBTAINING NECESSARY APPROVAL FORM THE COMPETENT AUTHORITY ON THE BASIS OF THE REASONS RECORDED, THE NOTICE U/S 148 OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE AND RE-ASSESSMENT WAS FRAMED BY MAKING ADD ITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY TO THE EXTENT OF RS.31,81,30 0/- AND UNDISCLOSED INCOME ON ACCOUNT OF UNEXPLAINED LOANS OF RS.20,00,000/- AGGR EGATING TO RS.51,81,300/- WHICH ACTION OF THE ASSESSING OFFICER, CAME TO BE CHALLEN GED BEFORE CIT(A) ON INITIATION OF RE- ASSESSMENT PROCEEDINGS AS WELL AS ON ADDITIONS MADE AND LD.CIT(A) WHILE HOLDING THAT PROCEEDINGS U/S 147 HAVE NOT BEEN VALIDLY INITIATED , HAS RESULTANTLY ANNULLED THE ASSESSMENT AND SINCE ASSESSMENT HAS BEEN ANNULLED, NO FINDING WAS GIVEN ON MERITS ON THE GROUNDS RELATING TO TWO ADDITIONS MADE BY THE A SSESSING OFFICER AND DEPARTMENT HAS CHALLENGED ACTION OF THE LD.CIT(A) IN ANNULLING THE ASSESSMENT.. I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 8 10.1 AFTER CONSIDERING HE RIVAL SUBMISSIONS IN THE LIGHT OF CASE LAWS AND MATERIAL ON RECORD WE FIND THAT THERE ARE VALID REASONS RECORDE D BY THE ASSESSING OFFICER FOR INITIATING RE-ASSESSMENT PROCEEDINGS AS INFORMATION WAS PASSED ON TO THE ASSESSING OFFICER WHICH WAS GERMANE TO THE ISSUE INVOLVED AND ASSESSING OFFICER HAS NOT ONLY RECORDED HIS SPECIFIC SATISFACTION/BELIEF THAT FAI LURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, WITHIN THE MEANING OF SECTI ON 147 OF THE ACT AND IN THIS CASE RETURN HAS ONLY BEEN PROCESSED ONLY WHEN SUFFICIENC Y OF REASONS CANNOT BE QUESTIONED, THEREFORE, ACTION OF THE ASSESSING OFFICER IN INITI ATING THE RE-ASSESSMENT PROCEEDINGS IS FOUND TO BE LEGALLY CORRECT. 11. AS REGARDS OBJECTION OF THE ASSESSEE ABOUT D ELAY IG SUPPLYING OF THE REASONS AND RELIANCE PLACED ON JURISDICTIONAL HIGH COURT IN THE CASE OF HARYANA ACRYLIC PVT. LTD. (SUPRA) IS CONCERNED, IT IS FOUND THAT THE SAME HAS BEEN CLEARLY DISTINGUISHED BY DIVISION BENCH OF THE HONBLE DELHI HIGH COURT IN A LATER DE CISION IN THE CASE OF A.G. HOLDINGS PVT. VS. VS. I.T.O. (SUPRA) AS UNDER: 10. IT WAS HOWEVER CONTENDED ON BEHALF OF THE PETITIONER, ON THE BASIS OF THE JUDGMENT OF THIS COURT IN HARYANA ACRYLIC MANUFACT URING CO. VS. CIT AND ANR (2009) 308 ITR 38, THAT THE REASONS FOR REOPENING T HE ASSESSMENT HAVING BEEN SUPPLIED TO THE PETITIONER BEYOND THE PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THE ENTIRE REASSESSMENT P ROCEEDINGS WERE INVALID. IT IS CONTENDED-THIS CONTENTION IS REFERRED TO IN PARA 12 OF THE REJOINDER AFFIDAVIT OF THE PETITIONER-THAT IF REASONS RECORDED FOR REOPENING T HE ASSESSMENT HAVE NOT BEEN FURNISHED WITHIN THE PERIOD PRESCRIBED IN SECTION 1 49(1), THE PROCEEDINGS PURSUANT TO THE NOTICE WOULD BE HIT BY THE BAR OF L IMITATION. IT IS POINTED OUT THAT IN THE PRESENT CASE, THOUGH THE NOTICE UNDER SECT ION 148 WAS ISSUED ON 15.3.2011, THE REASONS RECORDED FOR THE SAME WERE G IVEN TO THE PETITIONER ONLY ON 30.8.2011, WHICH WAS BEYOND THE PERIOD OF 6 YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THEREFORE THE ENTIRE REASSESSME NT PROCEEDINGS ARE INVALID. IT I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 9 IS NECESSARY TO REPRODUCE SECTION 149(1): (1) NO N OTICE UNDER SECTION 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR, - (A) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER CLAUSE (B); (B) IF FOUR YEARS, BUT NOT MORE THAN SIX YEARS, HA VE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME C HARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO A MOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR. EXPLANATION. IN DETERMINING INCOME CHARGEABLE TO TAX WHICH HAS SCAPED ASSESSMENT FOR THE PURPOSES OF THIS SUB-SECTION, TH E PROVISIONS OF EXPLANATION 2 OF SECTION 147 SHALL APPLY AS THEY A PPLY FOR THE PURPOSES OF THAT SECTION. THE OBJECTION OF THE PETITIONER, AS WE UNDERSTAND THE SAME, IS NOT THAT THE NOTICE UNDER SECTION 148 WAS ISSUED AFTER THE EXPI RY OF THE PERIOD OF 6 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE OBJECTION IS ONLY THAT THE REASONS RECORDED WER E PROVIDED BY THE RESPONDENT AFTER A PERIOD OF 6 YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR. THE CONTENTION IS THAT IN SUCH A CASE THE REASSESS MENT PROCEEDINGS ARE BARRED BY LIMITATION ON THE BASIS OF THE JUDGMENT OF THIS COU RT CITED SUPRA. WE ARE UNABLE TO ACCEPT THE CONTENTION. THE RECORD PRODUCED B EFORE US BY THE LD. STANDING COUNSEL SHOWS THAT SANCTION FOR THE PROPOSAL TO R EOPEN THE ASSESSMENT WAS ACCORDED BY THE ADDITIONAL COMMISSIONER OF INCOME T AX ON 9.3.2011. THE NOTICE TO REOPEN THE ASSESSMENT WAS ISSUED ON 15.3.2011. THE REASONS FOR REOPENING THE ASSESSMENT HAD BEEN RECORDED ON 9.3.2011. THES E WERE HOWEVER SUPPLIED TO THE PETITIONER ONLY ON 30.8.2011. THERE IS NO RE QUIREMENT IN SECTION 147 OR SECTION 148 OR SECTION 149 THAT THE REASONS RECORDE D SHOULD ALSO ACCOMPANY THE NOTICE ISSUED UNDER SECTION 148. THE REQUIREMENT I N SECTION 149(1) IS ONLY THAT THE NOTICE UNDER SECTION 148 SHALL BE ISSUED. THER E IS NO REQUIREMENT THAT IT SHOULD ALSO BE SERVED ON THE ASSESSEE BEFORE THE PE RIOD OF LIMITATION. THERE IS ALSO NO REQUIREMENT IN SECTION 148(2) THAT THE RE ASONS RECORDED SHALL BE SERVED ALONG WITH THE NOTICE OF REOPENING THE ASSESSMENT. THE REQUIREMENT, WHICH IS MANDATORY, IS ONLY THAT BEFORE ISSUING THE NOTICE T O REOPEN THE ASSESSMENT THE ASSESSING OFFICER SHALL RECORD HIS REASONS FOR DOI NG SO. AFTER THE DECISION OF THE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD. (SUP RA) THE ASSESSING OFFICER IS DUTY BOUND TO SUPPLY THE REASONS RECORDED FOR REOP ENING THE ASSESSMENT TO THE ASSESSEE, AFTER THE ASSESSEE FILES THE RETURN IN RE SPONSE TO THE NOTICE ISSUED UNDER SECTION 148 AND ON HIS MAKING A REQUEST TO THE ASSE SSING OFFICER TO THAT EFFECT. WHAT HAPPENED IN THE CASE RELIED UPON BY THE PETITI ONER IS THAT THE REASONS SUPPLIED TO THE ASSESSEE IN THAT CASE BY TH E ASSESSING OFFICER WERE DIFFERENT FROM THE REASONS PURPORTEDLY RECORDED IN THE FORM ATTACHED TO THE I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 10 COUNTER-AFFIDAVIT FILED BY THE REVENUE BEFORE THE H IGH COURT. THE ASSESSEE IN THAT CASE HAD TAKEN A SPECIFIC PLEA THAT IN THE ABSENCE OF ANY ALLEGATION THAT HE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FAC TS NECESSARY FOR ASSESSMENT, THE ASSESSING OFFICER HAD NO JURISDICTION TO ISSUE THE NOTICE AFTER 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IT WAS APPARE NTLY TO OVERCOME THIS OBJECTION THAT THE REASONS ATTACHED TO THE COUNTER AFFIDAVIT HAD CONTAINED A STATEMENT TO THE EFFECT THAT THE ASSESSEE HAD FAILED TO FURNISH FULL AND TRUE PARTICULARS AT THE TIME OF THE ASSESSMENT. THESE REASONS HAD NEVER BEEN COMMUNICATED TO THE ASSESSEE AND IT WAS ONLY FOR THE FIRST TIME IN THE COURSE OF HEARING OF THE WRIT PETITION THAT THEY HAD SURFACED. THIS COURT HELD THAT IF THE DA TE OF FILING OF THE COUNTER AFFIDAVIT WAS TAKEN AS THE DATE OF COMMUNICATION O F THE REASONS, THEN THERE WAS AN UNREASONABLE DELAY OF MORE THAN 3 YEARS BETWEEN THE DATE ON WHICH THE ASSESSEE IN THAT CASE MADE A REQUEST FOR SUPPLY OF THE REASONS AND THE DATE ON WHICH THE COUNTER AFFIDAVIT WAS FILED. IT IS NOTEW ORTHY THAT THE ASSESSEE HAD MADE A REQUEST TO THE ASSESSING OFFICER ON 11TH MAY, 200 4, WHEREAS THE COUNTER AFFIDAVIT WAS FILED ON 5TH NOVEMBER, 2007. IT WAS ON THIS BASIS THAT THE DIVISION BENCH OF THIS COURT HELD THAT THE NOTICE UNDER SECT ION 148 COULD NOT HAVE BEEN ISSUED BEYOND A PERIOD OF 6 YEARS FROM THE END OF T HE ASSESSMENT YEAR WHICH IN THAT CASE WAS 1998-99. THE LAST DATE FOR ISSUE OF NOTICE WAS 31.3.2005. I T MAY THUS BE NOTED THAT THE JUDGMENT OF THIS COURT IN HARYANA ACRYLIC MANUF ACTURING CO. (SUPRA) TURNED ON THE PECULIAR FACTS OF THAT CASE, WHERE TWO SETS OF REASONS HAD BEEN RECORDED, BY THE ASSESSING OFFICER. IN THE FIRST SET OF REAS ONS THERE WAS NO ALLEGATION OF NON-DISCLOSURE OF PRIMARY FACTS BY THE ASSESSEE. IT WAS ONLY IN THE SECOND SET OF REASONS RECORDED WHICH SURFACED FOR THE FIRST TIME IN THE COUNTER AFFIDAVIT FILED BY THE REVENUE BEFORE THE HIGH COURT, THAT THE OMISSIO N ON THE PART OF THE ASSESSEE TO FURNISH FULL AND TRUE PARTICULARS HAD BEEN SPE CIFICALLY MENTIONED. THE OUNTER AFFIDAVIT HAD BEEN FILED WAY BEYOND THE EXPIRY OF A PERIOD OF 6 YEARS FROM THE END OF THE ASSESSMENT YEAR. IT WAS ON THESE FACTS THAT IT WAS HELD THAT THE REASSESSMENT PROCEEDINGS WERE INVALID. IT IS SIGNI FICANT TO NOTE THAT THE RECORDING OF THE REASONS UNDER SECTION 148(2) SHALL PRECEDE THE ISSUE OF NOTICE UNDER SECTION 148(1) AS INDICATED CLEARLY BY THE WORDS B EFORE ISSUING ANY NOTICE UNDER THIS SECTION. THE RECORDING OF PROPER REASONS I N THE CITED JUDGMENT WAS TAKEN AS 5.11.2007, THE DATE ON WHICH THE COUNTER AFFIDAV IT WAS FILED. THAT DAY ITSELF WAS AFTER THE EXPIRY OF 6 YEARS FROM THE END OF THE ASSESSMENT YEAR 1998-99. IF A NOTICE ON THE BASIS OF THOSE RECORDED REASONS WERE TO BE ISSUED IN THE CITED CASE UNDER SECTION 148(1), THAT WOULD HAVE BEEN POSSIBLE ONLY EITHER ON 5.11.2007 OR LATER, BECAUSE THE ISSUE OF NOTICE CANNOT PRECEDE T HE RECORDING OF THE REASONS. THEREFORE, THE REAL RATIO OF THE JUDGMENT, AS WE UN DERSTAND IT, IS THAT THE REASSESSMENT WAS INVALID BECAUSE THE NOTICE UNDER SECTION 148(1), HAD IT BEEN ISSUED ON THE BASIS OF THE REASONS RECORDED ON 5.11 .2007, WOULD HAVE BEEN HOPELESSLY TIME BARRED. IN OUR OPINION, THIS IS TH E BASIS UPON WHICH THE JUDGMENT OF HARYANA ACRYLIC MANUFACTURING CO. (SUPRA) WAS RENDERED BY THIS COURT. I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 11 11. THE FACTUAL SITUATION IN THE CASE BEFORE US IS HOWEVER DIFFERENT. THERE ARE NO TWO SETS OF REASONS RECORDED BY THE RESPONDENT IN T HE PRESENT CASE. THE REASONS WERE RECORDED ON 9.3.2011. IT WAS ON THE BASIS OF THESE REASONS THAT THE APPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME TAX WAS O BTAINED AND THEREAFTER NOTICE UNDER SECTION 148 WAS ISSUED ON 15.3.2011. THERE IS NO DISPUTE THAT THE NOTICE WAS SERVED ON THE PETITIONER. THERE IS ALSO NO DISPUTE THAT THE REASONS RECORDED BY THE RESPONDENT ON 9.3.2011 WERE SUPPLIE D TO THE PETITIONER ON 30.8.2011. THESE REASONS UNDISPUTEDLY WERE THE SAME AS WERE RECORDED BY THE ASSESSING OFFICER ON 9.3.2011. THE ONLY FEATURE IN THE PRESENT CASE IS THAT THERE WAS A DELAY OF 4 MONTHS IN SUPPLYING THE REASONS RECORDED BY THE ASSESSING OFFICER TO THE PETITIONER. THIS BY ITSELF CANNOT INVALIDATE THE REASSESSMENT PROCEEDINGS. THE FACTUAL SITUATION IN THE PRESENT CASE IS ENTIRELY DIFFERENT FROM THE FACTS OF THE CASE BEFORE DIVISION BENCH OF THIS COURT IN HARYANA ACRYLIC MANUFACTURING CO. (SUPRA). THE RATIO LAID DOWN IN THAT CASE CAN THEREFORE HARDLY HAVE ANY APPLICATION TO THIS CASE. ACCORDINGLY, THE CONTENTION OF THE PETITIONER IS REJECTED. 12. CONSIDERING THE ENTIRETY OF FACTS, CIRCUMSTANC ES AND MATERIAL ON RECORD IN THE LIGHT OF RATIO OF THE AUTHORITATIVE PRONOUNCEMENT O F HONBLE SUPREME COURT AND JURISDICTIONAL HIGH COURT, WE ARE OF THE VIEW THAT THE ACTION OF THE ASSESSING OFFICER FOR INITIATION OF RE-ASSESSMENT PROCEEDINGS IS LEGALLY CORRECT AND JUSTIFIED IN THIS CASE. THEREFORE, THERE WAS NO OCCASION FOR CIT(A) TO HOLD THE RE-ASSESSMENT TO BE INVALID. AS SUCH, WHILE ACCEPTING THE APPEAL OF THE REVENUE IN THIS REGARD, WE REVERSE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER WI TH REGARD TO INITIATION OF ASSESSMENT PROCEEDINGS. SINCE, CIT(A) HAS NOT CONSIDERED AND DEALT WITH THE ISSUES RAISED ON MERITS, THEREFORE, ORDER OF THE CIT(A) IS SET ASIDE AND MATTER IS RESTORED BACK ON HIS FILE WITH THE DIRECTION TO DECIDE THE CASE ON MERITS AFT ER GIVING DUE OPPORTUNITY TO THE ASSESSEE AS WELL AS TO THE ASSESSING OFFICER. WE HOLD AND D IRECT ACCORDINGLY. I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 12 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 21.08.2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT EMBER (U.B.S. BEDI) JUDICIAL MEMBER DATED : AUG. 21, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXVI, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NO.2321/DEL./2011 (A.Y. 2002-03) 13